It's old school FS. People like me were doing FS way before it had a name.
Duplicate the Background layer twice. Change both of them to smart objects.
Hide the top layer, then apply Gaussian Blur to the bottom layer, to get rid of the texture.
Add the blank layer and clone out the letters.
(Not shown in the PSD) Group those two layers and add a layer mask to the group, and mask.
Return to the top layer and apply the High Pass.
Add the blank layer and smooth the texture using the Mixer Brush.
Put both those layers into a group, then change the group blend mode to Linear Light, then add the layer mask and mask.